The U.S. Securities and Exchange Commission (SEC) announced the formation of a new internal division, the Cyber and Emerging Technologies Unit (CETU), to safeguard investors from fraudulent activities in the realms of cryptocurrency and artificial intelligence.

CETU will serve as the successor to the Crypto Assets and Cyber Unit established in 2022, reflecting an organizational evolution within the agency.

Laura D'Allaird, a seasoned SEC enforcement veteran, has been appointed to lead CETU. D'Allaird's previous roles include co-chief of the Crypto Assets and Cyber Unit and adviser to former Democratic Commissioner Jaime Lizárraga. Her experience is expected to be instrumental in driving the objectives of the new unit.

SEC Acting Chair Mark Uyeda emphasized the dual purpose of CETU in a statement, highlighting its role in both investor protection and fostering innovation. Uyeda stated, "The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow. It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.”

CETU's work will align with initiatives led by Republican Commissioner Hester Peirce, who is at the helm of the newly established Crypto Task Force. Peirce has already set forth her intentions for the task force, which includes the potential reclassification of certain tokens as "non-securities."

The new unit's mandate includes investigating fraudulent activities involving AI and machine learning, as well as blockchain technology and cryptocurrency-related fraud. This move comes as the SEC adapts to a regulatory shift under the new Trump administration, which has adopted a different stance compared to the approach under former Chair Gary Gensler.

The SEC has expressed its desire to navigate a "sensible regulatory path that respects the bounds of the law," particularly in relation to the burgeoning crypto sector.

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